The rating is based on the Liquidity and Security Agreement,
which fully supports the program. The agreement is provided by The Fuji
Bank and Trust Ltd., New York Branch.

The Fuji Bank, Ltd.'s short-term obligations are rated
'F-1'. The rating outlook is positive. The rating reflects a
number of important factors, including the bank's improving asset
quality, a revamped risk profile covering credit, market and operational
risk and an enhanced capital position via an anticipated Y 210 billion
(US$1.85 billion) issue of new preferred stock. A continuing focused
program of cost reduction is expected to enhance the bank's
operating profile. Additionally, a restructured risk and pricing matrix
is expected to benefit the bank's return on assets and equity,
while a solid core deposit base within Japan provides substantial
liquidity. Important geographical diversification of earnings includes
its U.S. based finance company, Heller International Corp.

The bank's principal objectives include positioning itself
as a recognized integrated financial services group meeting global
standards and the establishment of a culture of cost competitiveness,
which will be required to operate effectively in an environment of
increasing liberalization and deregulation. The bank has initiated a
restructuring effort, including a 10% reduction in full time personnel
during the 1996-98 period, primarily through attrition and a
rationalization of the branch structure. For the near-term, expenses
are being contained by a policy of no increases in base compensation in
FY 1996 and a payroll cut for senior managers, as well as a freeze on
general and administrative expenses at the FY 1995 level (excluding the
mandated increase in deposit insurance premiums and investment for a new
computer processing unit).

Fuji's net income of Y 57.2 billion for the first half of FY
1996, ended Sept. 30, reflects a sharp reduction in credit costs from
improved asset quality measurements. Credit costs of Y 80.7 billion
were down 64% from last year's first half. The bank's net
business profit (gyomu jun-eki) was below first half FY 1995, as
market-related activities (realized gains on bond sales) were reduced
from the extraordinarily high levels of the earlier period. When
comparing the two first half periods, operating expenses were
essentially flat. Fitch expects the remaining major asset quality
problem will be covered by provisions during the second half of FY 1996,
ending March 31, 1997. Reserve coverage of expected nonperforming loans
plus restructured loans is projected to be about 75% on a fully taxed
basis -- one of the higher levels among major Japanese banks.